The Government plans to spend hundreds of billions of dollars expanding Australia's military, but Mr Turnbull says the Government announced the boost without providing a plan to pay for it.

"Nobody reading this white paper could have any confidence that the Government has the capacity the commitment or even knows that it's going to pay for this dramatic expansion in our military hardware," he said.

"[It's] back of the envelope calculations to fund this enormous additional financial commitment."

The Federal Government will acquire new submarines, destroyers, combat helicopters and fighter jets over the next 20 years to defend Australia and promote stability in the neighbourhood.

The main expense will be the acquisition of 12 submarines, fitted with land-attack cruise missiles.

It is the largest single defence project in Australia's history.

The cost of the expansion has not been finalised, but Mr Rudd says the Defence Department can help out by operating more efficiently.

The Federal Government says the Defence Department must find saving of $20 billion over the next decade to help fund the expansion of Australia's Defence forces.

Mr Rudd says Australia is responding to a significant military and naval build up across the region.

"We are faced with a series and challenges across the wider Asia-Pacific region and we must therefore ensure that our men and women in uniform have the proper kit and equipment and assets to meet a range of contingencies in the future," he said.

'Obsessed with China'

Mr Turnbull also says the white paper seems to assume China will become a military threat.

"It seems to be based upon the anticipation of a major conflict with China something most people would regard as being very unlikely and not realistic in the context of Australia's future relations and future strategy in the Asia Pacific," he said.

The paper says China will be the strongest Asian military power "by a considerable margin".

"A major power of China's stature can be expected to develop a globally significant military capability befitting its size," the paper reads.

"But the pace, scope and structure of China's military modernisation have the potential to give its neighbours cause for concern if not carefully explained, and if China does not reach out to others to build confidence regarding its military plans," it said.